JAKARTA - Danantara Indonesia, Indonesia Investment Authority (INA) and Chandra Asri Group officially signed a Conditional Share Subscription Agreement (CSSA) to strengthen the production capacity of Caustic Soda and Ethylene Dichloride (EDC) domestically and increase domestic supply resilience. This is a follow-up to the Memorandum of Understanding (MoU) that has been signed by Danantara Indonesia, INA and PT Chandra Asri Pacific Tbk (Chandra Asri Group), where Danantara Indonesia and INA are strategic investors in the project.
This agreement marks a phase of capital commitment in supporting the construction of the Chlor Alkali - Ethylene Dichloride (CA-EDC) plant in Cilegon, Banten which is developed and operated by the Chandra Asri group. This project aims to reduce the import dependence on critical raw materials in various industries, while promoting the downstream agenda as part of the long-term economic transformation.
The presence of domestic caustic soda production capacity is expected to significantly strengthen import substitution and domestic supply resilience. Meanwhile, EDC production not only supports domestic industrial needs, but also has the potential to increase exports, contributing to foreign exchange, along with strengthening the competitiveness of the national chemical industry.
The construction of the CA-EDC plant has a project value of 800 million US dollars, and is part of the National Strategic Project (PSN) which focuses on the production of essential raw materials for upstream and downstream industries. Caustic Soda is used as a raw material used in the production process of soap and detergents, alumina purification, to the paper making process. EDC is the main raw material that drives the construction and packaging industries.
In the agreed investment structure, Danantara Indonesia and INA will jointly invest a total investment of 200 million US dollars. This funding will be used to build a strategic CA-EDC industrial facility managed by PT Chandra Asri Alkali (CAA), a subsidiary of the Chandra Asri Group, and is planned to start operating in 2027.
Pandu Sjahrir, Chief Investment Officer of Danantara Indonesia, said that today's agreement confirms Danantara Indonesia's commitment to strengthening national strategic industries that provide high added value, create jobs, and accelerate Indonesia's economic growth.
"This collaboration is not only a response to the challenge of import dependence, but also as a tangible step to accelerate downstream processing, the key driver of the Indonesian economy," he said in a written statement, Tuesday, March 3.
Eddy Porwanto, Acting Chairman of the INA Board of Directors, stated that this investment reflects INA's long-term investment mandate to mobilize capital in sectors that are national priorities.
"Together with Chandra Asri Group as the main actor of the largest integrated petrochemical industry in Indonesia and the leading in Southeast Asia, and Danantara Indonesia as a long-term investor partner, this collaboration aims to build a strong capital foundation to support the sustainable development of strategic raw material industry capacity. This effort is expected to encourage downstream, increase added value in the country, as well as strengthen the competitiveness and resilience of the national industry," he explained.
President Director and CEO of the Chandra Asri Group, Erwin Ciputra, welcomed the participation of Danantara Indonesia and INA as strategic investment partners in this CA-EDC project. This support reflects confidence in the capabilities of the Chandra Asri Group in developing this facility.
"We hope that this CA-EDC project can significantly reduce the dependence on the import of strategic chemicals, strengthen the resilience of the national supply chain and support downstream processing. In addition, the construction and operation of this facility will also open up new job opportunities of 3,000 during construction and 250 during operation and provide sustainable impact for the community and industry in Cilegon and its surroundings," said Erwin.
In the first phase, the construction of the CA-EDC plant will have an annual production capacity of 400,000 tons of dry Caustic Soda per year and 500,000 tons of Ethylene Dichloride. This facility is developed with high standards of industrial technology and safety to ensure operational efficiency, supply reliability and compliance with the principles of sustainability.
The collaboration between Danantara Indonesia, INA, and Chandra Asri Group is a manifestation of synergy between state investment managers and leading petrochemical companies. By strengthening the domestic supply chain while opening up wider export opportunities, this partnership contributes to accelerating sustainable industrialization and strengthening Indonesia's competitive position in the global market.
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